Make-to-Order Job Shop Accounting Solutions and Much More

By Thomas R. Cutler

The make to order (MTO) strategy only manufactures the end-product once the customer places the order. This can create additional wait time for the customer to receive the product, but allows for more flexible customization compared to purchasing from inventory. The make to order (MTO) strategy relieves the problems of excessive inventory that is common with the traditional make to stock (MTS) strategy. The make-to-order business needs to have effective and accurate estimating and quoting as well as BOM’s (bill of materials), Order Entry, Scheduling, Job Costing and Tracking, Purchasing, Quality, Inventory Control, and Full Accounting.

Magdic Precision Tooling (MPT) is a nineteen-person tool and die shop in East McKeesport, PA. The company makes compaction dies for carbide cutting tools. Die forms look like drills, end mills, and cutting inserts.

Even this small shop recognized they had to go paperless. According to Paul Ventura, vice-president of Shoptech, “Much of the information for the jobs at Magdic was on hard copy. Different employees were machining different components for a given job simultaneously and employees were constantly searching the shop for prints. Job changes were tough to communicate to the shop floor and more than 30 minutes a day (per employee) was lost tracking information. ..this waste cost the company more than $300K a year.”

Making the Transition to Paperless:

- PC’s were strategically placed throughout the shop.- Hard-copy prints coming into the shop are scanned and attached to jobs.- All employees had access to drawings, pictures and routings.- Changes were communicated instantaneously.- Employees able to log on/off jobs real time.- Work Queue shows employees which jobs to work on.- All attachments can be printed at any time.- Ease of use – Employees “bought into” the system.

“The impact of going paperless Increased productivity on the shop floor. Employees are all working on the same page. No time is wasted searching for documents,” according to Ventura. The company has better job tracking, job status and progress of components. The E2 solution implemented by Shoptech helped scheduling as well as improved quoting, since the actual times are more accurate. Estimators are better informed.

Ultimately, beyond the lean process improvements, MPT has happier customers because of on-time deliveries and promise dates are more realistic. The average dollar per hour has increased with– more profits dropping to the bottom line.

PMS Manufactured Products is located in picturesque Gloucester, Mass. and has served customers around the world for over forty years with a fully equipped facility; PMS offers a complete range of precision metal cutting and forming services, and has set and maintained consistently high standards for quality, cost control and on-time delivery.

Similar to the experience at Magdic Precision Tooling, PMS Vice President Dayne Perruzzi, recalled as he and his employees became more familiar with the E2 system, they were able to expand their use of the system to include shop floor control, routing, and estimating material requirements.

About Author Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc, (www.trcutlerinc.com). Cutler is the founder of the Manufacturing Media Consortium of nearly four thousand journalists and editors writing about trends in manufacturing. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, Committee of Concerned Journalists, as well as author of more than 500 feature articles annually regarding the manufacturing sector. Cutler can be contacted at trcutler@trcutlerinc.com or 888-902-0300.